Camden National Corp (CAC) Reports Q4 and Full Year 2023 Financial Results Amidst Market Challenges
Net Income: $8.5 million for Q4, a 13% decrease from Q3 2023.
Diluted EPS: $0.58 for Q4, down from $0.67 in Q3 2023.
Asset Quality: Remains strong with non-performing assets at 0.13% of total assets.
Capital Ratios: Common equity ratio improved to 8.66% and tangible common equity ratio to 7.11%.
Loan Growth: Total loans increased by 1% since Q3 2023 and 2% year-over-year.
Investments: Sold at a loss to improve future earnings, contributing to a pre-tax investment loss of $5.0 million.
Deposits: Decreased by 2% since Q3 2023 and 5% year-over-year.
On January 30, 2024, Camden National Corp (NASDAQ:CAC) released its 8-K filing, detailing the financial results for the fourth quarter and the full year of 2023. The bank holding company, with $5.7 billion in assets, reported a net income of $8.5 million and diluted earnings per share (EPS) of $0.58 for the fourth quarter, marking a 13% decrease from the previous quarter. Camden National, known for its comprehensive banking solutions, faced significant challenges in 2023, including an evolving interest rate environment and industry-wide bank failures.
The company's strategic response to these challenges involved selling lower-yielding investments at a loss, which was reflected in the pre-tax investment losses of $5.0 million for the fourth quarter. Despite these losses, Camden National's adjusted pre-tax, pre-provision income was $15.8 million, a decrease of 6% from the third quarter of 2023. The company's focus on maintaining long-term shareholder value and positioning for future growth opportunities has led to a fortified balance sheet and stabilized net interest margin.
Financial Performance and Asset Quality
Camden National's capital position remained robust, with an increase in the common equity ratio to 8.66% and the tangible common equity ratio to 7.11%. Asset quality continued to be a strength, with loans 30-89 days past due at 0.12% of total loans and non-performing assets at 0.13% of total assets. The return on average assets and equity showed a decline, with the adjusted return on average assets at 0.87% and the adjusted return on average equity at 10.53% for the fourth quarter.
Loan growth was distributed across various portfolios, with residential real estate, commercial real estate, and commercial loans each growing by 1%, and the consumer and home equity loan portfolio growing by 2%. The company's loan pricing strategy was adjusted to focus on deposits, net interest margin, and asset quality, resulting in 48% of residential mortgages originated being sold compared to 20% in the previous year.
Investment and Deposit Strategies
The company's investment strategy involved selling $70.4 million of investments with a weighted-average yield of 3.02% at a pre-tax loss of $5.0 million, aiming to fund loan growth or reinvest in higher interest-earning investments. Deposits saw a decrease, with checking and savings account balances declining by 4% due to seasonal outflows and a shift to higher interest-bearing accounts. Certificates of deposit and money market balances, however, saw an increase in the fourth quarter.
Capital and Dividends
Camden National's regulatory capital ratios exceeded requirements, and the company announced a cash dividend of $0.42 per share, representing an annualized dividend yield of 4.46%. Additionally, the company repurchased 65,692 shares of its common stock at an average price of $30.44 per share during the year and announced a new share repurchase program for 750,000 shares.
The company's financial results reflect the strategic decisions made in response to the challenges faced in 2023. As Camden National enters 2024, the focus remains on leveraging its strong balance sheet to drive future growth and continue delivering value to shareholders.
For a detailed analysis of Camden National Corp's financial results, interested parties are encouraged to join the conference call and webcast scheduled for 3:00 p.m. Eastern Time on January 30, 2024.
Explore the complete 8-K earnings release (here) from Camden National Corp for further details.
This article first appeared on GuruFocus.
